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Bank of Japan Holds Rate, Announces Liquidity Measures

December 21, 2011 by CentralBankNews   Comments (0)

The Bank of Japan kept its interest rate unchanged at 0-0.10% and made no changes to its 55 trillion yen quantitative easing program.  The Bank said: "The pick-up in Japan's economic activity has paused, mainly due to the effects of a slowdown in overseas economies and of the appreciation of the yen.  As for domestic demand, business fixed investment has been on a moderate increasing trend and private consumption has remained firm.  On the other hand, exports and production have remained more or less flat, due in part to the effects of the slowdown in overseas economies and of the yen's appreciation as well as of the flooding in Thailand.  Improvement in business sentiment has slowed on the whole despite steady improvement in domestic demand-oriented sectors."

The Bank of Japan also announced the establishment of temporary bilateral liquidity swap arrangements with five central banks (CAD - Canada, GBP - UK, EUR - EU, CHF - Switzerland, and USD - US ).  The Bank of Japan noted on the move:  "The measures aim at further facilitating money market operations as well as ensuring the smooth functioning and stability of financial markets."  See full details here.
At its October meeting the Bank of Japan expanded its asset purchase program by another 5 trillion yen to 55 trillion yen, and previously announced additions to its quantitative easing program during its August meeting.  The Bank had previously changed its asset purchase program in March this year, when it added a further 5 trillion yen to its target.  Japan reported annual headline consumer price inflation of 0% in October and September, down from 0.2% in both August, July and June, and 0.3% in both May and April.  

The Bank has previously forecast real GDP growth of 0.2-0.6% in fiscal 2011, and 2.5-3.0% in fiscal 2012.  Meanwhile, nominal GDP growth in Japan was recorded at -0.5% in June and -0.9% in March, placing it at -1% in both quarters on an annual basis.  The Japanese Yen (JPY) has gained around 5% against the US dollar so far this year; the USDJPY exchange rate last traded around 77.75

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Things worth reading: 21st December 2011

December 21, 2011 by skinnercm   Comments (0)

Things we're reading today include ...


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Morocco Central Bank Holds Interest Rate at 3.25%

December 21, 2011 by CentralBankNews   Comments (0)

The Bank al-Maghrib of Morocco kept its main policy rate steady at 3.25%.  The Bank said: "In this context where the central inflation forecast is permanently consistent with the price stability objective and the balance of risks is tilted to the downside, in conjunction with international developments, the Board decided to keep the key rate unchanged at 3.25 percent."

Previously the Bank also held interest rates unchanged in September this year; it last changed its interest rate in March 2009 when it reduced the rate 25bps to 3.25%.  Morocco reported annual inflation of 0.5% in November, with -0.4% deflation in October, 0.8% in September, 2.2% in August, 1.8% in July and 0.7% in June.  

The Moroccan Dirham (MAD) has weakened around 1% against the US dollar this year, while the USDMAD exchange rate last traded around 8.50.  The Bank al-Maghrib next meets on the 27th of March 2012.

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Hungary Central Bank Raises Rate 50bps to 7.00%

December 20, 2011 by CentralBankNews   Comments (0)

The Magyar Nemzeti Bank hiked its central bank base rate by another 50 basis points to 7.00% from 6.50%.  The Bank said: "The Monetary Council decided to raise the base rate by 50 basis points in view of increased perceptions of the risks associated with the economy and upside risks to inflation. If risk perceptions and the outlook for inflation deteriorate significantly further, it may prove necessary to raise interest rates again."

The Magyar Nemzeti Bank previously also hiked the rate 50 basis points at its November meeting, after last raising it 25 basis points in January this year.  Hungary reported annual inflation of 3.9% in October, up from 3.6% in September and August, 3.1% in July, 3.5% in June, 3.9% in May, and 4.7% in April.  Hungary's Central Bank has a medium term inflation target of 3%, while the Bank expects inflation to average 3.9% this year.

The Hungarian economy grew at an annual rate of 1.5% in the June quarter, compared to 2.4% in the march quarter, and 1.9% GDP growth recorded in the December quarter last year.  The Hungarian forint (HUF) has lost about 12% against the US dollar this year, the USDHUF exchange rate last traded around 230

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